The originals will always be on the device which took them. Copies will be on any devices to which PhotoStream has downloaded them. Resetting PhotoStream won't remove any photos from any devices, and no photos can be in PhotoStream which aren't already on one device or another.
Photostream will upload any photo to the stream when you have it enabled, turning it off on your device will not allow you to see the photo stream or upload any more camera shots, the photos that were already there will stay there.
The only way to delete the photos is through the www.icloud.com website, click on your name (top right) go to advance and you can reset your stream there.
As far as I know the next IOS release will allow you to select individual images and delete them, at the momment the only thing you can do is reset the stream.
I'm hoping that a service like iTunes Match will emerge for photos. It would --
1. Backup all iPhotos to Clould. (Within some sort of reason. Like if you have gigs of photos instead of several terabytes.)
2. New photos selected as 'keepers' backup to stream from devices.
3. We can select where photos stream. Including webpages for no iDevice peeps.
Along those lines.
Roger - I'm having trouble with Photostream which is not transferring all of my pictures on my other devices ... I was advised to turn PS off on both my Mac and my iPhone and see if that kick started the transfer, however I get a dire warning when I go to turn Photostream off on my iPhone ... essentially it says 'turning off Photo Stream will delete all Photo Stream photos from your iPhone' ... does this mean that I will lose everything in PS that has not transferred to iPhoto? I'm reluctant to do this!
Thanks for your help!